Biggins, John --- "Dirty complexity: money laundering through derivatives" [2013] ELECD 929; in Unger, Brigitte; van der Linde, Daan (eds), "Research Handbook on Money Laundering" (Edward Elgar Publishing, 2013) 321

Book Title: Research Handbook on Money Laundering

Editor(s): Unger, Brigitte; van der Linde, Daan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857933997

Section: Chapter 24

Section Title: Dirty complexity: money laundering through derivatives

Author(s): Biggins, John

Number of pages: 11

Abstract/Description:

Trading in financial derivatives has increased exponentially in recent decades. This is especially true with respect to over-the-counter (OTC) derivatives. Given the relative opacity, complexity and size of the derivatives markets (particularly the OTC segments) they may be hospitable breeding grounds for money laundering. From the turn of the twenty-first century up to the global financial crisis (GFC) originating in 2007, trading in OTC derivatives between sophisticated market participants in some of the largest markets was not substantially directly regulated. Amongst other things, this generated concerns with respect to the integrity of audit trails in these markets (FATF 1999, p. 13;hereinafter 1999 FATF Report). In the wake of the GFC, proposals for regulatory reform in OTC derivatives market infrastructure have been forthcoming in many jurisdictions. Amongst developed economies, the US, in particular, has made notable progress at time of writing.